Senior representatives from the Government of Pakistan (GOP) will be going to a conference in Japan on 24th September 2019 to discuss Japan’s interest in investing in Pakistan’s Energy Sector. This action taken by the GOP is based on its Indicative Generation Capacity Expansion Plan (IGCEP) 2018-40 which proposes to phase out almost all thermal power plants while increasing the energy generation capacity by 300 percent in the next 20 years.
National Transmission and Despatch Company (NTDC) in consultation with public and private sector agencies and consultants have prepared an IGCEP 2018-40 which proposes to phase out almost all thermal power plants while increasing the energy generation capacity by 300 percent in the next 20 years.
The IGCEP 2018-40 states that the government of Pakistan (GOP) needs to increase the generation capacity based on three tentative economic growth (GDP) scenarios which are as follows:
Scenario 1: If Pakistan’s GDP growth rate is at 4.5 percent then the GOP needs to increase generation capacity to 65,100 megawatts to generate 370,500 gigawatt-hour.
Scenario 2: If Pakistan’s GDP growth rate is at 5.5 percent then the GOP needs to increase generation capacity to 80,500 megawatts to generate 458,000 gigawatt-hour.
Scenario 3: If Pakistan’s GDP growth rate is at 7 percent then the GOP needs to increase generation capacity to 110,000 megawatts to generate 630,500 gigawatt-hour.
Click GOP’s plans to improve the energy sector by 300 percent to read the details.
Pakistan’s Energy History with Japan
Pakistan’s energy history with Japan dates back to 1977. Japan has been assisting Pakistan in both energy generation projects and transmission infrastructure. Below you will find an overview of Japan’s support to Pakistan in the energy sector.
1992-1994: Bin Qasim Thermal Power Station Extension Project.
In order to meet the increasing demand for electricity, Japan provided Pakistan’s local distribution company (Karachi Electric Supply Company – KESC) with a loan worth Japanese Yen (JPY) 15.3 billion to install and develop Bin Qasim thermal power station which is located in Karachi. This lead to an addition of 410 megawatts to the total energy mix.
1996-1997: Ghazi Barotha Hydro Power Project.
For this project, Japan provided Pakistan a loan of JPY 35 billion to construct a renewable energy complex (Hydro) and a barrage with a channel of 52 kilometers (km). This lead to an addition of 1450 megawatts to the total energy mix.
2005: Load Dispatch System Upgrade Project.
2006: Dadu-Khuzdar Transmission System Project
2008: Punjab Transmission Lines and Grid Stations Project
2010: NTDC Grid Station Strengthening Project
Pakistan received a loan worth JPY 42.78 billion to construct additional facilities of transmission lines and grid stations with the aim to reduce power shortage and transmission loss.
2010: Renewable Energy (Solar Energy) Project
For this project, Japan provided Pakistan with a grant worth JPY 480 million to replace outdated fossil fuel generation units with renewable energy power plants. The grant was also used to develop and implement the climate change policy of Pakistan.
By setting up of solar energy panels in the Ministry of Planniing Commission and Pakistan Engineering Council in Islamabad, this project promoted awareness and clean energy utilization.
Japan to Discuss Investment in Pakistan’s Energy Sector
Mr. Omar Ayub Khan (Federal Minister of Energy) in a meeting with Japanese Ambassador Kuninori Matsuda on 17th September stated.
“Keeping in view the interest shown by the Japanese investors and companies in the energy sector of Pakistan, I will personally lead the Pakistani delegation at the conference.”
The minister emphasized on the making of an updated and new ‘renewable energy policy’ which will make renewable and alternative energy a major contributor in the total energy mix. The policy stands to give a lot of benefits to investors and consumers.
You can read the goals of the draft renewable energy policy by clicking here.
The Japanese Ambassador thanked Mr. Omar Ayub Khan for his personal intervention and said that Japan and Pakistan have close ties and Japanese companies are looking forward to Pakistan’s visit.
This is good news for both countries but Pakistan needs to be clear on what is really required. Pakistan faces a supply-demand parity, lack of rural electrification due to a low transmission and distribution network and grid proximity (70% of Pakistan is rural and overall grid connectivity stands at 42% to date), high cost of well-to-consumer for several reasons (dilapidated development infrastructure, shortage of investment, lack of essential resources, security, etc), rising fuel import bill and shortage of fuel transport civil linkages.
Keeping this aspect in mind, Developing infrastructure is what’s required. Providing basic utilities to each and every citizen should be the ultimate goal and Pakistan has plenty of renewable energy resources to meet that goal. We all hope this meeting brings forth mutual benefit to both countries.
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